After the recent news of a possible advertising alliance between Yahoo and Microsoft, another major change may be in the offing at the beleaguered Internet company with another round of job cuts. (See: Microsoft, Yahoo reportedly in talks for advertising partnership)
The New York Times reported that Yahoo will likely cut several hundred more people, and other news sources have since confirmed the report. Last year, Yahoo cut some 2,400 people and ended the year with about 13,600 workers.
The cuts, which Yahoo had hinted last December might be necessary, would be a clear sign not only of new CEO Carol Bartz's influence, which included a recent management shakeup, but also of Yahoo's continuing struggles.
For the past two years or so, it has been losing more and more ground the search ad giant Google. That led to Microsoft launching a hostile bid for Yahoo early last year, which distracted management and accelerated the departure of more top executives and engineering talent - some to Microsoft.
Last year Microsoft offered $47 billion for Yahoo, but the Sunnyvale web portal refused the deal and fought off Microsoft. That angered some shareholder groups, including a group led by Carl Icahn, and Yahoo then had to fight a proxy war. (See: Microsoft withdraws from Yahoo!; shareholders restive with Yang / Major shareholder supports Yahoo CEO against Carl Icahn)
Founder and CEO Jerry Yang, who started Yahoo, suffered from these battles and ultimately surrendered the corner office, returning to his erstwhile title of ''Chief Yahoo.'' The company brought in former Autodesk boss Carol Bartz as CEO (See: Yahoo has new CEO, Carol Bartz). Microsoft CEO Steve Ballmer has already had a meeting with Bartz to discuss possible partnership areas and said he was not averse to a tie-up. (See: Microsoft still keen on slice of Yahoo: Ballmer)
Meanwhile, its mainstay display-ad business has stagnated, mostly thanks to the proliferation of advertising networks that help marketers reach prospective customers far more cheaply than on Yahoo's marquee home page and other frequently visited pages. More recently, despite a better-than-expected fourth quarter, Yahoo and much of the online ad industry have seen new pressures from the recession.